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Not dead yet – Aereo tries to reinvent itself by arguing that it is a cable system entitled to carry television stations pursuant to the statutory license

The Supreme Court decision in the Aereo case seemed to be the end of the line for the service that was retransmitting television stations signals without consent, as it found that the broadcasters were entitled to an injunction to force Aereo to cease the public performance of their signals without consent. In fact, Aereo itself seemed to think so too, shutting off its service soon after the decision. But in a move that was surprising to some, Aereo has apparently not thrown in the towel, and it is now back in Court with a two-pronged argument as to why its service is still viable (see its letter to the Court here). First, it argues that, as the Supreme Court seemed to think that Aereo acted like a cable system and should be treated in the same manner as a cable system for purposes of determining whether its retransmission of a television stations signal was a public performance, it might as well be treated like a cable system for all purposes, and thus it should be entitled to carry the signals of TV stations pursuant to the statutory license granted to cable systems by Section 111 of the Copyright Act. Second, it argues that, even if it does not qualify for treatment as a cable system, it should nevertheless be able to retransmit television signals – just not in real time, as the Aereo contends that the Court decision only prevented simultaneous and near simultaneous retransmissions of the television stations’ signals. Offering once again a fearless prediction – I doubt these arguments will help Aereo any more than did their arguments before the Supreme Court.

Admittedly, their argument that they qualify as a cable system under the Copyright Act has some appeal. In fact, as we noted in our summary of the oral argument before the Supreme Court, the Justices even asked why the company did not qualify as a cable company. Section 111 of the Copyright Act defines a cable system as follows:

A “cable system” is a facility, located in any State, territory, trust territory, or possession of the United States, that in whole or in part receives signals transmitted or programs broadcast by one or more television broadcast stations licensed by the Federal Communications Commission, and makes secondary transmissions of such signals or programs by wires, cables, microwave, or other communications channels to subscribing members of the public who pay for such service.

That language is seemingly broad, covering not just what most of us think as a cable system (one that uses wires to transmit TV programming to the customer), as it talks expansively of “other communications channels” to deliver programming. Of course, when satellite TV started, they were unsure of their status under this definition, and ended up getting a whole new section of the act to determine their ability to retransmit local TV signals to their subscribers. But even if this section can be read expansively to cover Aereo, what does that get them?

Seemingly, not much. What they are seeking is the right to rely on the cable compulsory licenseset out under the Copyright Act to retransmit the TV signals into their local market for a nominal payment to the Copyright Office and adherence to certain other rules. But Section 111 provides that cable systems can only retransmit TV stations pursuant to the compulsory license “where the carriage of the signals comprising the secondary transmission is permissible under the rules, regulations, or authorizations of the Federal Communications Commission.” So that means that we next look at the FCC rules.

Looking at the FCC rules would seem to suggest the problem with Aereo’s argument, as the rules would seem to require exactly what Aereo does not want – the necessary permission of the broadcast stations for the rebroadcasting of their signals (and the associated costs for securing such rights through retransmission consent payments). Specifically, Section 76.64 of the FCC’s rules states:

After 12:01 a.m. on October 6, 1993, no multichannel video programming distributor shall retransmit the signal of any commercial broadcasting station without the express authority of the originating station, except as provided in paragraph (b) of this section

The exceptions set forth in the rules do not seem to apply to Aereo, and the definition ofmultichannel video programming distributor seems broad enough to cover them should they be determined to be a cable system:

A multichannel video program distributor is an entity such as, but not limited to, a cable operator, a BRS/EBS provider, a direct broadcast satellite service, a television receive-only satellite program distributor, or a satellite master antenna television system operator, that makes available for purchase, by subscribers or customers, multiple channels of video programming

So, if you read that language as broadly as you read the Copyright Act’s definition of a cable system, you end up with Aereo needing retransmission consent – which they seemingly have not yet been willing to seek.

But do any of these rules really even apply to a service like Aereo? Is this broad reading of the rules justified? The FCC itself has had a proceeding open for several years to see if an IP-based video delivery system could qualify as an MVPD. In that proceeding, about which we wrote here and here, the delivery network, SkyAngel, wanted to be considered an MVPD so that it could get access to cable programming, not so much for purposes of carrying local TV stations. But the FCC’s proceeding to look at this issue is could be broad enough that it would encompass the retransmission consent issues that the Aereo case triggers.

Courts have also looked at this issue in the past. A service called “ivi” tried to argue that it was a cable system for Copyright purposes, but not for FCC purposes, and was shot down by the same US District Court that will be hearing the Aereo case (see the ivi decision here). The Court basically said that it was not Congress’ intent, nor that of the Copyright Office, to allow IP-based systems to take advantage of the cable rules – especially while ignoring the FCC’s rules. While ivi was different than Aereo in that it did not limit the retransmission of the TV signals to their home markets, the overall reasoning of the decision does not seem inapplicable. The Copyright Office itself has looked at making suggestions to Congress to expand the compulsory license to IP-based systems (see this summary of the Copyright Office proceeding), but Congress has not done so.

Aereo’s other argument, that the Supreme Court only prohibited near-simultaneous streaming of the TV signals seems similarly unavailing. That was the issue before the Court, so that was what the Court decided. But if Aereo delayed the retransmission of the TV signals would the decision have been any different? The relevant statutory authority on which the Court relied to find that Aereo was making a public performance of the TV stations’ signals seems to cover delayed as well as live programming. A public performance is defined as occurring when a service:

Transmit[s] or otherwise communicate[s] a performance…of a [copyrighted] work…to the public, by means of any device or process, whether by members of the public capable of receiving the performance…receive it at the same time or at different times

We’ve added the emphasis, but the language comes from the act, and would sure seem to apply to delayed programming as well as that which is transmitted simultaneously or near-simultaneously with its broadcast.

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